P.N. Shinghal, J.
1. The plaintiff and the defendant have filed appeals against the appellate judgment and decree or the CivilJudge of Jalore dated October 7, 1965. The plaintiffs appeal is No. 41 of 1966, while appeal No, 512 of 1965 has been filed by the defendant I shall dispose them of by this judgment.
2. Mr. L. Rule Mehta, learned counsel for the defendant, has not pressed the defendant's appeal. Only the plaintiffs appeal therefore remains for consideration. In that appeal also, the controversy in this Court has been confined to the question whether the tenancy of the defendant was terminated by a valid notice. This was the subject-matter of issue No. 8 and it will be enough to state those facts which have a bearing on it.
3. The plaintiff is the owner of the suit house which is situated in Jalore. He stated in the plaint that he let it out to the defendant on Kartik Bad 10, Section 2006 (October 17, 1949) on an annual rent of Rs. 210 calculated at the rate of Rs. 17/8/-per month, for a period of 10 years. He also stated that the defendant executed a rent-note (Ex. 1) in his favour the same day and got it registered. The plaintiff received the rent up to January 18, 1955 and the payments were endorsed at the back of the rent-note. He felt aggrieved because the defendant did not pay the rent after January 18, 1955, in spite of reminders. After the expiry of the period of the tenancy, the planitiff gave a notice to the defendant to redeliver the possession of the house to him, but without success. The claim for arrears of rent became barred by time for some period and the plaintiff instituted the present suit on March 26, 1962 for the recovery of Rs. 630 as arrears of rent and damages. He also prayed for the eviction of the defendant on the ground that he had committed more than three defaults in the payment of the rent.
4. The defendant denied that the plaintiff was his landlord, or that he was his tenant, and pleaded that he was in possession of the suit house as it was his ancestral property. Further, he pleaded that the rent-note was not duly registered and was not admissible in evidence, and that the notice given by the plaintiff was invalid so that there was no termination of his tenancy according to the law. In the replication, the plaintiff made it clear that the suit house had been mortgaged by the plaintiff in his favour, with possession, for Rs. 3,500 and that the deed of mortgage as well as the rent-note were duly registered. The plaintiff also clarified that it was after delivering the possession of the suit house to him as mortgagee that the defendant took it on rent. It was specifically pleaded that the relationship of landlord and tenant existed between the parties. As regards the defence regarding the invalidity of the notice, the plaintiff pleaded that it was devoid of any force.
5. The trial Court held that as the period of the tenancy was 10 years, the defendant continued in possession of the suit premiseswithout the express consent of the plaintiff after the expiry of that period and that he was not entitled to a notice under Section 106 of the Transfer of Property Act. That Court therefore decreed the suit. The defendant preferred an appeal which was decided by the impugned judgment of the Civil Judge of Jalore He went to the extent of holding that the defendant continued to be the tenant by holding-over after the expiry of the period of 10 years, but that his tenancy, after that period, was a tenancy from month to month which could only be determined by a notice in accordance with Section 106 of the Transfer of Property Act. As such a notice was not given, the learned Judge allowed the appeal and set aside that part of the decree of the trial Court which related to the defendant's eviction. It is in these circumstances that the present second appeals have been filed by the parties.
6. Section 107 of the Transfer of Property Act deals with the creation of leases of immoveable properties and provides as follows :
'107. A lease of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument
All other leases of immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.
Where a lease of immoveable property is made by a registered instrument such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee:
Provided that the State Government may, from time to time, by notification in the Official Gazette direct that leases of immoveable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession.'
The section thus divides leases into two categories. Leases from year to year, or for a term exceeding a year, or reserving a yearly rent, or permanent leases fall in first category and can only be made by a registered instrument. The other leases, that is leases for a term not exceeding one year, or from month to month, fall in the second category and may be made by a registered instrument or by an oral agreement accompanied by delivery of possession.
7. The present lease falls in the first category because it was for a term exceeding one year and reserved a yearly rent. It could therefore be made only by a registered instrument. This has been done, but the third paragraph of Section 107 of the Transfer or Property Act requires that where a lease of immovable property is made by a registered instrument such instrument or,where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee. There is a proviso to this paragraph, but it is admitted that it has no application to the present case. The fact remains that for the purpose of creating a valid lease under Section 107 of the Transfer of Property Act it was necessary that the instrument or instruments of the lease should have been executed by both the parties. This is however not so because a perusal of document Ex. I shows that it was executed only by the defendant, and not by the plaintiff. It could not therefore create a valid lease for a period of 10 years, or reserve an annual rent, even though that might have been the intention of the parties. The learned counsel for the parties are therefore in agreement that Ex 1 was merely a 'Kabuliyat and fell within the definition of 'lease' in Section 2(7) of the Registration Act for purposes of that Act.
8. The 'kabuliyat' was however duly registered, as has now been admitted by the learned counsel for the defendant. The question is what relationship was created between the parties? To appreciate this aspect of the matter, it wilt be necessary to mention the other admitted facts.
9. It is admitted by the learned counsel for the plaintiff that the suit house belonged to the defendant and was mortgaged by him in favour of the plaintiff by a valid deed of mortgage and that the defendant took it on rent by executing rent-note Ex. 1 in favour of the plaintiff on October 17, 1949. As has been stated, the period of the tenancy was 10 years, and the annual rent of Rs. 210 was reserved for it with the stipulation that if the rent was not paid annually, in time, the plaintiff would be entitled to re-enter and realise the arrears of rent. The period of 10 years expired on October 16, 1959. The defendant paid the rent up to January IS, 1955, but not thereafter. The plaintiff gave him a notice on March 4, 1962 demanding the payment of the arrears of rent by way of damages and to deliver possession of the house within a period of 15 days. It is admitted that this 15 days' notice did not expire with the end of the month of the tenancy and was not therefore in accordance with Section 106 of the Transfer of Property Act
10. It has been argued by Mr. Bhandari that as Ex. 1 is admissible in evidence as a duly registered 'kabuliyat' even though it did not create a valid lease, those parts of it which are not of the essence of a lease within the meaning of Section 105 of the Transfer of Property Act can be read in evidence. There is force in this argument. At any rate the document is relevant for the purpose of showing the nature of the defendant's possession - that it was permissive. It is therefore satisfactory evidence of the fact that the plaintiff gave permission to the defendant to live in the suit house. In his replication the plaintiff has also clearly stated that he tookpossession of the suit house under the mortgage, and then re-delivered the possession to the defendant as his tenant. The fact that the defendant was in permissive possession has therefore been proved beyond any doubt.
11. Another important fact which has been established equally well, is that the defendant paid the rent to the plaintiff. The plaintiff has admitted in paragraph 3 of the plaint that the defendant paid him 'rent' up to January 18, 1955 on various dates, and that this payment of the 'rent' had been endorsed at the back of the rent-note (Ex. 1) from time to time.
12. The two facts which have therefore been fully established are that: (i) the defendant was in permissive possession of the suit premises, and (ii) he paid the rent therefor and the plaintiff accepted that payment as 'rent'. It is therefore fair and reasonable to conclude that the parties intended to create and did actually create a tenancy in respect of the suit house.
13. But there is still the question as to the duration of the tenancy. It is admitted that possession to the defendant was not given for use of the premises for agricultural or manufacturing purposes for it was a residential house. It can therefore be safely inferr-ed by reference to the provisions of Section 106 of the Transfer of Property Act, which lay down a rule of construction, that, in the absence of a valid agreement to the contrary, the duration of the lease was from month to month. I am fortified in this view by the decision in Ram Kumar Das v. Jag-dish Chandra Deo, AIR 1952 SC 23. In that case also there was a registered 'kabuliyat' by which the land was settled for a period of 10 years, on an annual rent. The defendant remained in possession of the land and paid rent. Their Lordships took into consideration the admitted facts that the defendant remained in possession of the land with permission, and paid the rent. From these facts they held that a tenancy could fairly be presumed and decided the question of its duration by invoking the rule of construction contained in Section 106 of the Transfer of Property Act as follows:--
'The section lays down a rule of construction which is to be applied when there is no period agreed upon between the parties. In such cases the duration has to be determined by reference to the object or purpose for which the tenancy is created. The rule of construction embodied in this section applies not only to express leases of uncertain duration but also to leases implied by law which may be inferred from possession and acceptance of rent and other circumstances. It is conceded that in the case before us the tenancy was not for manufacturing or agricultural purposes. The object was to enable the lessee to build structures upon the land. In these circumstances, it could be regarded as a tenancy from month to month, unless there was a contract to the contrary.'
14. A similar view has been taken by a Division Bench of this court in Lal Ghana v. Radha Ballabh, ILR (1958) 8 Raj 466 = (AIR 1959 Rai 240) on the basis of the abovementioned decision of their Lordships of the Supreme Court in Ram Kumar Das's case, AIR 1952 SC 23. In that case also, a 'kabuliyat' was executed by the defendant in favour of the plaintiff creating a lease for 3 years, with the condition that it would bo terminable on one month's notice. It was not registered and was not signed by the landlord. There was however no requirement in the Jaipur State, at the relevant time, for the registration of such a document. While, therefore, the 'Kabuliyat' was held to be admissible in evidence, it was decided that it could not create a lease under Section 107 of the Transfer of Property Act. At the same time it was held that there could be no doubt that a tenancy was certainly created and the nature of such a tenancy, after the 'Kabuliyat' had fallen on account of its invalidity as a lease, was a monthly tenancy. This decision also therefore supports the view which I have taken.
15. And once it is held that the defendant's was a tenancy from month to month, in respect of which there was no contract or local law or usage to the contrary, Section 106 of the Transfer of Property Act would at once be attracted. Such a tenancy would therefore be terminable by 15 days' notice expiring with the end of a month of the tenancy. Since as has been stated, it has been conceded by Mr. Bhandari that the notice in the present case did not fulfil this requirement of Section 106 of the Transfer of Property Act, it was not a valid notice and could not terminate the tenancy. The plaintiff is not therefore entitled to succeed in his claim for eviction.
16. It has however been argued by Mr. Bhandari that Ex. 1 was at least a contract by which the defendant agreed to allow the plaintiff to re-enter the premises on default in the payment of the rent. It has therefore been contended that there could be no reason why the defendant should not be held bound by the terms of that contract and dispossessed from the suit premises because of his failure to pay the rent after Jan. 18, 1955. The learned counsel has cited Mirza Mohammad Hasan v. Buddhu, AIR 1938 All 32, Ganga Sahai v. Badrul Islam, AIR 1942 All 330, Pyare Lal v. Ram Swaroop, AIR 1944 All 221, Maqbool Ahmad v. Debi, AIR 1949 All 455 to support this argument.
17. In Mirza Mohammad Hasan's case, AIR 1938 All 32, the father of the plaintiff got the premises on lease (after executing a kabuliyat') on a rent of Re. 1 per annum and thereafter his son, the defendant, succeeded his father. He withheld the payment of the rent and a suit was brought for his ejectment. It was held that the registered 'kabuliyat' could not create a valid lease for the reason that the landlord was not a party to it, but the document was not entirely in-admissible against the executant himself and as the defendant occupied the premises with the permission of the landlord on the understanding that he would vacate whenever the Zarninciar so desired and gave 15 days' notice, he (defendant) was bound to vacate the land when required to do so by the plaintiff. A reading of the entire judgment shows that the question of a monthly tenancy was not raised for consideration and it can-not therefore be said that that the view which I have taken in the present case did not find favour in that case. The decision in Ganga Salmi's case, AIR 1942 All 330 was based on Mirza Mohammad Hasan's case, AIR 1938 All 32 and 1 need not refer to it separately. The decision in Pyare Lal's case, AIR 1944 All 221 was based on facts which were somewhat different and the question of duration of the lease did not arise for consideration. In the remaining case of Maqbool Ahmad, AIR 1949 All 455, the decision was based on the abovementioned cases of Mirza Mohammad Hasan, AIR 1938 All 32, Pyare Lal, AIR 1944 All 221 and Ganga Sahai, AIR 1942 All 330 and I need not therefore refer to this case also separately. It will thus appear that the judgments of their Lordships of the Allahabad High Court cited by Mr. Bhandari cannot be said to lay down a view contrary to that taken by me in the present case.
18. The learned counsel has however cited two judgments of this Court in which the abovementioned view of the Allahabad High Court has been accepted and followed. The first of these is Kajodmal v. Baluram, 1955 Rai LW 117. In that case there was a lease for 3 years under a registered rent-note executed by the defendant. As there was no requirement in the former Jaipur State at the relevant time for the registration of such a rent-note, it was held to be admissible in evidence. The learned Judge took the document into consideration and held that as the executant had agreed to remain in possession only for 3 years, he was bound to surrender the possession after the expiry of that period, and relied on the decision in Maqbool Ahmad's case, AIR 1949 All 455. He did not however consider the matter with reference to Section 107 of the Transfer of Property Act and did not examine the question whether the stipulation regarding the period of the tenancy could at all be read in evidence. So also, the learned Judge did not consider the question whether a monthly tenancy could not be said to be created in the circiunstances of that case because of the fact that the defendant was in permissive possession and had paid, and the plaintiff had accepted, the payment of the rent.
19. The other case on which reliance has been placed by Mr. Bhandari is Chathu Lal v. Sardar Mal, ILR (1959) 9 Raj 31 = (AIR 1959 Raj 24). In that case a registered 'kabuliyat' was executed by the defendant in favour of the plaintiffs in which the term of the lease was stated to be 5 years. It washowever further agreed that if the lessors wanted to make constructions on the land or to sell it, the defendant would vacate it before the expiry of the term of 5 years. The plaintiff gave a notice of 3 days for vacation of the premises on the ground that he wanted to sell the land to some one else. It was held that the terms of the contract contained in the 'kabuliyat' were binding on the lessee, and reliance was placed on the decisions in Maqbool Ahmad's and Kajod-mal's cases, AIR 1949 All 455 and 1955 Raj LW 117. It appears however that it was not argued in that case that the 'kabuliyat' could not create a valid lease in view of the provisions of Section 107 of the Transfer of Property Act, and this judgment cannot also be of any real assistance to the appellant. In fact it appears that the decision of the Division Bench in Lal Chand's case, ILR (1958) 8 Raj 466 = (AIR 1959 Raj 240) was not brought to the notice of the learned Judge even though it was given some months earlier. It cannot therefore be said that the view which I have taken in the present case was considered and disapproved in that case.
20. It has next been argued by Mr. Bhandari that as document Ex. 1 could not create a lease of the suit premises because of the non-compliance of the provisions of Section 107 of the Transfer of Property Act, it should be held that there was only a licence in favour of the defendant and that it was not therefore necessary to give a notice for its termination. The learned counsel has based his argument on the decision in Dau Dayal v. Brij Mohan, AIR 1952 All 344. In that case the defendant usufructuarily mortgaged a house to theplaintiffs and executed a 'kabuliyat' where-by he promised to pay the sum of Rs. 13 per month as rent for a period of 5 years. No lease, as provided in Section 107 of the Transfer of Property Act, was executed or signed both by the lessors and the lessee, but the 'kabuliyat' was registered. The period of 5 years came to an end and the plaintiff served a notice on the defendant to vacate the house. As the defendant did not comply with the notice, a suit for ejectment was filed, but no claim for arrears of rent was included in that suit. While the ejectment suit was pending, the suit which gave rise to the appeal before their Lordship was filed for recovery of rent. It was held that the 'kabuliyat' failed to create a lease whether for a term exceeding one year or for a lesser term, because it was executed only by the lessee. Their Lordships observed that as it had not been alleged that there was an oral agreement accompanied by delivery of possession and that a lease was created thereby, there was no lease at all. They took the view that since the 'kabuliyat' 'certainly exhibited a contract between the parties to pay a certain amount every month in lieu of the occupation of the house,' it was a licence as it was not a lease. It was held that sucha contract was perfectly permissible and could not be said to be illegal or void on the ground that it defeated the provisions of any law. In particular, their Lordships observed that 'under Section 23 of the Contract Act, such a contract does not defeat the provisions of Section 107 of the T. P. Act, because by its execution the executant does not obtain the rights of a lessee.' They therefore concluded that no interest in immoveable property was created in his favour and he could be ejected at any time inspite of the 'kabuliyat'. A perusal of the judgment shows that their Lordships did not consider the effect of the facts that the possession of the defendant was permissive, and he had paid, and the plaintiff had accepted, the payment of the rent. In other words, their Lordships did not consider the question of the creation of a lease by an oral agreement accompanied by delivery of possession and excluded that eventuality by the observation that it was not alleged in the case that there was an oral agreement accompanied by delivery of possession and that a lease was created thereby. When their Lordships did not consider that question, it cannot be said that they have taken a contrary view. Moreover, if I may say so with respect, it was hardly necessary to give the finding that a licence was created in respect of the suit premises when no such plea had been taken. In the present case, however, it has clearly been pleaded in the plaint as well as in the replication that a lease was created between the parties and there is no reason why, in the absence of any legal impediment, effect should not be given to that intention.
21. Section 52 of the Easements Act defines a licence. It is settled law that the question whether a lease or a licence is created by an agreement between the parties, has to be decided on the basis of the real intention of the parties whether they intended to create a lease or licence. In the present case, as has been stated, the real intention of the parties was to create a lease and not licence. Besides, the legal possession of the property did not vest in the plaintiff after October 17, 1949 and it is admitted that as from that date it passed to the defendant and is still with him, to the exclusion of the plaintiff. Prima facie, therefore, it cannot be held that a licence was created so as to justify the defendant's eviction without a notice under Section 108 of the Transfer of Property Act. Moreover, the question whether the defendant held the premises as a licensee was essentially a question of fact and as no such plea was taken by him and as the point was not tried or raised for the consideration of the Courts below, it is not possible to allow its consideration for the first time in second appeal.
22. Faced with such a situation, Mr. Bhandari has argued that a tenant whoholds the premises under a 'kabuliyat', which is inadmissible in evidence for any reason, is a tenant at will and no notice is necessary to determine his tenancy. For this argument he has placed reliance on Janki v. Kanhaiyalal, AIR 1936 Oudh 102 and Gur Prasad v. Hansraj, AIR 1946 Oudh 144. A tenancy at will no doubt arises by implication or law in case of permissive occupation when a person is in possession of the premises with the consent of the owner e. g., where there has been possession under an invalid or void lease. But that relationship comes to an end as soon as the rent is paid and accepted as such. So where rent is paid, a tenancy at will becomes, by virtue of Section 106 of the Transfer of Property Act, a yearly or monthly lease according to the purpose for which it is taken. I am fortified in this view by the decision in Jhalku Singh v. Chan-drika Singh, AIR 1961 Pat 350. Besides, it has not even been pleaded in the present case that there was an agreement that the defendant would vacate the suit house on demand, and it cannot at all be said that there was a tenancy at will. The importance of the payment of rent and its acceptance as such does not appear to have been considered in the two Oudh cases cited by Mr. Bhandari, As has been held in Sudhir Kumar v. Dhirendra Nath, AIR 1957 Cal 625, the relationship of landlord and tenant is created by acceptance of the rent and such a lease is presumed to be a lease from month to month even though the possession was initially delivered under an invalid lease. There is therefore no force in this argument also.
23. Lastly, it has been argued that there was a clause in document Ex. 1 to the effect that if the defendant did not pay the rent in time, the plaintiff would be entitled to have the house vacated and realise the rent according to law, and that this amounted to a contract to the contrary within the meaning of Section 106 of the Transfer of Property Act so that no notice was necessary for the termination of the lease. This argument has been based on the further submission that the aforesaid clause could be read in evidence as it was not a part of the lease and could be separated from the other invalid clauses.
24. In order to appreciate this argument I may again make a reference to Seth Lal Chand's case, ILR (1958) 8 Raj 466 = (AIR 1959 Raj 240), in which the question of such separation of the valid clauses was taken into consideration in respect of a 'kabuliyat' which was not admissible as a lease under Section 107 of the Transfer of Property Act. In that case, their Lordships took the view that there could be no difficulty in separating those portions of the instrument which were not of the essence of the lease as defined in Section 105 of the Transfer of Property Act, and to consider then as a separate contract altogether fromthe contract of lease which was invalid. They reached the conclusion that term as to notice was not of the essence of the definition of a lease, and that it amounted to a contract between the parties. But their Lordships held that the time or the term of the lease was an essential part thereof within the meaning of Section 105 of the Transfer of Property Act, so that any agreement regarding the term or the period was evidence of the lease under that section. It could not therefore be read in evidence when the document containing it was invalid or void under Section 107. In the present case it was stated in agreement Ex. 1 that the term or the period of the lease would be 10 years, but this was qualified by the further agreement that if the rent was not paid annually in time, the plaintiff would be entitled to get the house vacated and realise the rent according to the law. The provision regarding re-entry of the landlord therefore related to the term or the period of the lease and had the effect of reducing it. It was therefore an integral part of the term or the period of the lease, and could not be separated from it. It was not a clause merely regarding the period of the notice or the mode of termination of the lease. Besides, a clause regarding forfeiture has to be strictly construed, and even if it is presumed that there was an agreement providing for the re-entry of the landlord on the failure to pay the rent, that clause related to the payment of the annual rent in terms of Ex, 1 and could not govern the monthly tenancy which has been held to exist.
25. There is thus no force in any of the arguments advanced by Mr. Bhandari. Theplaintiffs appeal (No. 41 of 1945) therefore fails and is dismissed. The defendant's appeal (No. 512 of 1963) has not been pressed and it is also dismissed. In the circumstances of the case, the parties are left to bear their own costs. Leave to appeal is prayed for, but is refused.